The 21st century is not only here, it’s 20% complete! At this point it’s almost passé to offer up bland sentiments about how ‘the future is now’. Anyone can see that technological innovation has impacted nearly every industry, or facet of life for that matter. Those who refuse to adapt are already paying the price, so rallying cries of ‘get with the times’ are cliché. True insight comes not just from keeping abreast of new technology, but in comprehending the big-picture and understanding how to leverage technological innovation. The finance and accounting industry is no exception. While some view automation and software as an existential threat to the profession, forward thinkers see it as a tool to be used in the evolution of the role.
Automation, AI and Big Data in Accounting
Cloud based accounting software is the new norm. Data entry, the filing of expense claims, the creation of quotes and invoicing are just a few of the formerly labor-intensive tasks that have evolved as a result of this automation.
“Automatic services have become commonplace in many sectors of the financial services industry,” writes Dennis Najjar for accountingdepartment.com. “Likewise, consumer automated tax preparation apps are heavily promoted during tax season.”1
According to Nick Chandi of PayPie, this automation represents “a trend that’s considered the greatest transformation since the introduction of double-entry bookkeeping 500 years ago.”2
The impactful innovations don’t end there. Blockchain technology allows for the execution of smart contracts, reducing arduous verification processes. The ubiquity of video conferencing and task management software has opened the door to ever greater collaboration and communication, ushering in a new age of outsourcing in all aspects of business, including accounting. Artificial intelligence and the harvesting of massive amounts of data present opportunities for a depth of financial analysis that was once unimaginable.
“The days of Microsoft Excel as the primary analytics program are fast coming to a close,” says Najjar. “Today, financial controllers and CFOs use structured data, unstructured data, and predictive analytics to access massive banks of customer information, financial trends and industry information to make insightful forecasts for [companies].”1
Beyond Bean Counting: The Evolution of the Accountant
Does all of this technology spell the end of the accountant? Not so fast, according to Chandi, “The short answer is no. Discussions of a robot revolution are honestly more sensational than factual. In the real world, the technologies transforming the financial industry will in no way render the human factor redundant.”2
In fact, the reduction of time necessary to complete mundane tasks will free the accountant to focus on more analytic tasks. Forward thinking accountants will learn to leverage technology to elevate their role from that of bean counter to consultant and analyst. According to one study, 30% of small businesses place accountants at the top of their list of trusted advisors.3
Chandi continues, “Accountants and financial professionals can future-proof their careers by embracing technology and building on their roles as their [companies’] most trusted and valued business advisers. As administrative tasks become automated, forward-thinking accountants can build value through services like cash flow consulting. Time and again, cash flow is cited as a business-killer. For accountants who seize the opportunity to turn better and more accurate data into actionable insights, the future is more than assured.”2
As the role evolves, some learning institutions are keeping pace, including communication and computer science training alongside more traditional finance, accounting and taxation lessons.3 It’s all a part of creating candidates that meet the wider expectations that are being placed upon them.
Najjar sees the glass as half full, “A positive prediction is that machines and robotic automation will enhance the value of services, not detract from it,” he says. “Some experts predict a hybrid approach where advanced technology will sit comfortably with human advisors to offer [companies] the best of both worlds.”1
One thing that’s for sure is that finance and accounting professionals are not alone in their need to evolve in the wake of technological innovation. Just like the travel, manufacturing and entertainment and food service industries, finance has seen paradigm-shifting developments in recent years, and these will continue to occur. Whether this is seen as an opportunity or a threat is a matter of attitude, preparation and capacity for change.
“Finance leaders are now creating a balance of maintaining their traditional responsibilities while developing a corporate strategy with digitization and automation in mind,” according to F&A solutions partner Infinit-O. “AI and humans can work together to strengthen companies: the former to smoothen routine processes and provide accountants better access to real-time information.”4
Cited Sources
1 Najjar, Dennis. “5 Trends Driving Disruption in the Accounting Industry.” 5 Trends Driving Disruption in the Accounting Industry. Accessed January 3, 2020. https://www.accountingdepartment.com/blog/trends-disrupting-accounting-services-industry
2 Chandi, Nick. “Accounting Trends Of Tomorrow: What You Need to Know.” Forbes. Forbes Magazine, September 13, 2018. https://www.forbes.com/sites/forbestechcouncil/2018/09/13/accounting-trends-of-tomorrow-what-you-need-to-know/#78cfe700283b
3 “7 Digital Accounting Trends Will Affect CPA Firms in 2020.” By giaglad. Accessed January 3, 2020. https://hackernoon.com/7-digital-accounting-trends-will-affect-cpa-firms-in-2020-6du30lh.
4 Infinit-O. “5 Big Finance & Accounting Trends in 2020.” Outsourcing `Resource Center. Accessed January 3, 2020. https://resourcecenter.infinit-o.com/blog/5-big-finance-accounting-trends-in-2020.